advisor, cooperman we will have much more with lee cooperman tomorrow including interviews from davos and morgan stanley ceo james gorman all tomorrow at 8:00 eastern time right here on bloomberg television. ♪

>> live from bloomberg headquarters in new york this is "market makers," with erik schatzker and stephanie ruhle. >> welcome to the world economic forum here in davos, switzerland, and once again stephanie, this is the place to be. david rubenstein is with us, ceo of the private equity powerhouse the carlyle group. that is a good place to start don't you think? >> without a doubt. and oil war, opec versus the show producers in the u.s. >> you'll be hearing from him in just moments. here's a question for you -- how come fixed income trading has fallen off the cliff? a lot of bankers are at fema question and they are worried about liquidity. the ceo of bank of america, brian moynihan will be along later in the show, and we will be putting that question to him. >> erik, my friend, this is the

super bowl of business tv. welcome to "market makers." i am stephanie ruhle. >> and i am erik schatzker. we live from the world economic forum in the beautiful alpine setting of doubles, switzerland. >> as beautiful as it is here come it is time to talk about the huge plunge in crude oil. the selloff really took hold in november when opec refused to prop up prices by increasing production. they want a price war with u.s. show producers and bloomberg's francine lacqua if any by with the opec secretary-general. >> i am delighted to speak with the secretary-general of opec, first here in davos. thank you so much for giving us this interview. this is what businesses are asking, this is difficult to do, are the price is going to come down before they come back up? >> i cannot answer this question for sub it is very difficult but starting late 2014 coming

down very fast, the change in the fundamentals we were looking to this, and we see the price to client very fast. until now, the price was still at $47, $48 and we have not seen when the price will settle down. >> is this actually show producers versus opec, and a game of who blinks first? >> no. it is against the nobody. believe me. we met in november. we debate the world economy, we debate supply and demand. we see that opec did not increase production for the last

14 years. none of these apply, i am not talking about shale or anybody else, i am talking about the supply increase by $7 million a day. so we said if we're going to reduce, this will be a collective decision by opec and not opec. >> and shale producers. you are not discriminating. >> our ministry decided to keep production as it is. we are not targeting the united states shale oil we are not targeting russia, we are not targeting anyone. it is a pure economic decision for the interests of our member countries. >> at what price will opec start -- $30? >> no we left this to the

market decide. with the market decides, we will follow. >> the markets are saying there's too much oil out there. am i wrong? >> the problem of this oil you have, none of the supply is above 7 million a day. all of this is very high cost. you have to have $100 to produce it, to sell it, so we think that we cannot really reduce the production. that means we are subsidizing the $100 price. >> i understand it is a standoff between opec and the others non-opec, but again -- >> it is not about that -- >> but you are saying it is unfair for opec to subsidize. >> is not a standoff. it is really a fair treatment. we have not increased our production for the last 10

years. why? non-opec are increasing their production by 7 million. it is a problem in the market. >> you are one of the most astute oil strategists, right. if you do not want to do me a price that opec is targeting, is there a price where others will be reduced to close down investments, or just produce less? >> the market itself -- if you are production is a very high cost, you will get out of the market. >> but you are doing the calculations. is there a cutoff point where you think it will change? >> you know this brazilian production, you really don't know. the united states production you really do not know because they have 200 companies. one makes $100, one makes $110 one makes $60, you do not know what the price --

>> ok, at $20 or $30, opec's life will be very difficult, back to fair assessment. >> i am not going to tell you. i am not going to tell you because this is not true. >> ok. >> i think the price will go to $25 or $45. i think the price will stay where it is that now and maybe -- next year in june, after the first half of 2015, this will be very clear. we will know exactly how this low price affected life. >> $47, $50 is a fair price? >> you keep asking me about price. >> i do. >> we do not set the price. we are not very happy with this low price, of course but we are also not very happy with a very high price, with a very low price. >> how difficult is it then to

predict the market? >> it is very difficult to predict the market. it is not really supply and demand and fundamentals, how much oil is produced and non-opec produced, it is also activities. they are very active, they take every chance and try to use it. >> to downsize. >> to the downside and upside. you remember i was here before and you are asking me why do you not decrease, now you are asking me why you don't why we don't reduce our production so i have been grilled both ways you know. >> i know, i remember very well although it seems now like a very long time ago. give me a sentence of whether strategists should welcome a rapid decline, because that deals with the problem and then you move on, and whether that goes to the up, down, up down

-- >> this decline was very rapid. when we met the price had to find by 40%, now it is 60%, and i think the price -- we have seen this before. the price comes and goes and goes up very slow but the price will rebound. >> how are opec members getting along at the moment? >> i would like to thank the president here because he is tackling the problem right. they are talking to opec and non-opec together. they are talking to both sides, which is the right way you know because this is a collective decision by opec and non-opec. >> did you meet altogether? >> we have no objection to meet if they have decided to cut. >> so you want them to cut? >> yes, for sure, because of the supply, they want to increase.

non-opec increases by 7 million barrels a day. >> are you getting pressure? >> no no pressure. we finish at the end of november so only a couple of months, so we need some time. >> the price it is very clear that you cannot give anything away. give me a sense in terms of time frame when you think non-opec may start cutting production. two months, three months? it goes back to price. >> yes, it goes back to price. >> and that price -- >> it goes from place to place. some locations they live with that supply come other locations are not living. cutting investment, cutting off people, which i do not really encourage, and they are doing a lot of things to cut costs. >> what you are telling me basically is that the price of oil continues to fall to wear

actually people will have to cut production, putting you in a more comfortable place. >> i do not say the price will keep coming down, no, i do not think so. i think the price will stay at $45, $48, $50. it will stay for some time here and then i'm sure it will rebound. >> there is too much out there of oil but you do not see a problem with growth maybe we are not seeing, it is not a black swan. >> know, demand is not really growing, as we forecasted. demand is very slow, and because of the world economy, the world economy is bad. the united states is the only country that really has good economic growth. china is coming down. most of the world -- europe is also facing problems. until we see an increase in growth in the world economic growth and we see an increase in demand, then price will not come

up. >> at the same time, oil prices are benefiting growth, so do you have politicians and government thinking you that actually this is giving a very welcome boost to their economy? >> no, nobody thinking me, nobody ever thinks me, up or down. [laughter] the problem now for the eu economy, for most of the world economy, but i am not in favor of the government to see this low price, so let us increase taxes. this will be a problem. >> someone you are concerned about? >> it has happened before. every time the price comes down they increase taxes because they want to balance their budget. >> it is interesting, we were right in the same place three years ago talking about prices being way too high. is $100 a barrel now achievable again?

is it something we will see in the next five years or six years, or never say never? >> maybe. if we don't invest if we do not have a new supply, if we do not have an intentional -- an additional supply after five years, maybe we see more than $100. >> is that your main concern the price of oil, or is the main concern because the price keeps going down, we are just not investing enough? >> both. >> what is your biggest one? >> we need a fairer price and at the same time, we need investment. i told our member countries the other day, and today, keep investing because this has been a repetition. it has happened before where people do not invest, they think they have a enough oil, they have to use this money for something else, so they do not invest. then the world economy rebounds and we do not have enough

supply, right. in one of two $147. >> -- it went up to $147. >> are you meeting with investors here? >> it is interesting, you know, people are trying, you know, but at the same time, some of them have very high costs. deep water, remote areas, all of them they have to discern them. >> abdalla el-badri thank you do so much, the secretary-general of opec. i did not get a price i tried but it was a good glimpse of what the will economy is going through in the price of oil. >> a great interview, thank you so much of our own francine lacqua and opec general secretary. >> great to have him here abdalla el-badri. let's, stephanie, take a moment as we reflect on what mr. el- badri told francine about what

we also heard, just a few moments ago, bloomberg reported that the ecb, the board of the european central bank has proposed a 50 billion euro a month program upon a state through the end of 2016. it would begin more or less -- >> the size -- 1.1 trillion euros. that is basically $1.3 trillion. >> between now and the end of 2016. >> when we were speaking of to larry summers -- >> the question is how fast they are spinning the money. it was going to be $500 billion a year, so is the market going to be satisfied with $1 trillion over the space of two years? >> let's not waste time talking to each other about it. >> yes, let's go to some but he who will have a much better answer than what stephanie or i will be able to give you, david rubenstein, this is an annual tradition. >> thank you but i do not think

i have a better answer. >> you have an answer which is important, if you see the ecb european central banks, make the decision tomorrow, that the quantitative easing starts tomorrow an -- starts in march, and in some in 2016, what effect will have? >> when you catch the market by surprise, you have a bigger impact initially, but they really have not telegraph exec we what they are going to do, so i suspect the market is a little surprised. i think it is about the size of the market with think is appropriate, probably appropriate -- proportionate to what the united states federal reserve did, so i think will have the desired effect. it is interesting that the united states is thinking of increasing interest rate in the middle of the year and europe is really doing the opposite. >> you think it will have the same effect? a eurozone is much more difficult to manage monetarily than the united states, which is just a single country. secondly, there is some question as to whether europe is in a

worse situation, macro economically speaking, then united states was when the fed began its quantitative easing. we were in a freefall, but at least they got the ball rolling. >> win the federal reserve started, we were probably in a worse situation than europe. any program went on for several years. the ecb is not saying we will do this today and all of a sudden it is going to have the effect. >> you really think the united states was in worse shape than europe is today, given what unemployment is? >> at the time, when we went into this, yes, we were in a freefall, the united states was in a recession. europe is not technically in a recession right now, so yes, i think we were in worse shape than europe is today. there are different concerns that the bigger concern in europe right now is deflation and high unemployment, youth unemployment, and there is some slow growth in some of the southern european countries, but europe is not falling apart or anything like that. >> when you say does better for central bankers to act with surprise -- >> generally when they do that

-- >> we were surprised last week -- >> generally has a bigger effect on the market. >> most definitely it had a bigger effect. >> win markets discount with the central bank is going to do because they know that we what it is going to do, it probably does not have the same effect, so when the market is the price i think it does have a bigger impact initially. >> what to do you think about the big surprise we had last week as the -- as it relates? >> that was a surprise and obviously a lot of people were hurt. when i watch tv at night, sometimes not bloomberg, but other things, you see foreign currency traders, they say you can trad for foreign currency -- you can trade foreign currency, you will not see those ads anymore. >> no, you won't. we heard from abdalla el-badri the opec sector in general. oil is another factor in this mix. do you think $50 barrel oil is good or bad? >> on balance, it is good for

europe. the most awarded thing we have to remember is that europe is a gigantic consumer of oil from outside of europe, therefore it is a tax cut, just like the united states has had a big tax cut. europe has to take advantage of it and not to say well, because we've had tax cut their prices will be lower, we do not have to do anything else. i think the european governments have to do some income, the ecb is doing something. one of the side effects could be if the price of oil stays very low and russia is hurt, and russian companies, which have borrowed so much from the european banks, cannot service that debt, that would be a follow for european banks. european banks are not as strong as american banks, but you do not know exactly what the spillover effect will be yet. >> do you think that will happen? >> it is too early to say. >> how long before that because a realistic probability? >> it depends if the russian government wants to use its reserves to help. we do not know yet.

but every thing has a spillover effect and a domino effect, so it is not easy to say well, oil price is down, every thing is great for the consumers, because there is some spillover effect. there have been some cutbacks, and for sure we had 500 fewer rigs today than we had maybe a few months ago, and that probably will go down another couple hundred rigs, so we are drilling lesson will probably produce less. >> you have got a number of oil producers in your portfolio. >> we have a lot of capital to invest in the energy world, and when you can invest at lower prices and hopefully eventually come back, it will be good, so we have the minimus in our portfolio, so we have a lot of dry powder, and we will invest in things we think will be cheap now. >> you think it is a good opportunity to invest. >> it is great if you have energy capital to invest. >> how much do you think to put to work in the space of 2015? >> it is foolish to say how much because you cannot predict and we do not know. energy distressed debt will

probably be attractive, but some people who borrow too much may not be able to pay back the debt on the terms they thought they would be able to and they will probably have opportunities to buy their debt at discount. >> how much lowered you think oil prices could go? >> it is hard to know. they probably have touched bottom for a while, but anytime oil prices are not going to go higher or lower, you are wrong. last year at this time, nobody was protecting oil would go where it is now. nobody. >> i know you are not going to tell me exactly how much carlyle is going to spend because you do not know yet -- >> it is too early to know. >> it is important for people to understand the sort of scale of program you have in mind. when you look at equity investments in oil companies, when you look at distressed debt opportunities, are you talking about tens of billions of dollars of capital? >> we have millions of dollars of capital we recently race.

a large investor in the united states in gas and an oil and we just have a large international fund that we have almost finished raising. we also have an infrastructure fund and a power fund, so we have a lot of different vehicles that we can use. >> what kind of rack up to these vehicles have? hedge fund to offer a much shorter lockup have struggled. what these investments look like? >> typically when you invest in a private equity fund, you have a five-year period so these are 10-year lockup funds but you can get out of them because they are secondary market and nobody is in prison. it not have to eat this thing forever if they do not want to. typically people who stay in for 10 years tend to do better, and that is why they stay in these funds. >> carlyle is among the private equity funds contemplating -- >> we are contemplating. >> what is the appeal? >> some large investors say i do

not need money back right away, i do not need about every two years, three years or four years -- hold it for 10 years because if you are going to give me the money back and i am going to put it in cash and get 04 it, my lender is less than what you are telling me it is. if it is 20% and you give it back to me a cash at zero, it might be 10% or 12%, so hold onto the money and get me 14% 60% rates of return and give me some current yield, but hold onto it for 10 years. a lot of sovereign wealth funds have a lot of capital and can afford to do that. >> this is more from the sovereign wealth funds and less from the endowments, for example? >> the endowments less physically than pension. >> across the board, you have so many portfolio companies. given the market volatility, do you feel like you want to hold off on ipo's right now? >> defending what the market

says. if the market opened for ipo's, we will take advantage of it. most of our exits are not through ipo's but through trade fails up ipo's are a small part of the way we exit. it is an important part, but not the most of what in part. >> david, when you look at your portfolio companies, do you see evidence of an accelerating company or do you see leakage from china and europe causing the u.s. recovery to decelerate? >> we own roughly 80 companies in the u.s. through our various portfolios, and we correlate the data with gdp and other macroeconomic factors and based on that right now, we think the u.s. economy is going to grow about 3.5% this year which is a lot what the imf has that, they set about 3.4%, and we think that number is roughly likely. the numbers contained, we are january 21 but we do not know whether there will be some deleterious thing happening around the world, something we cannot anticipate. there is always a black swan somewhere. no one anticipated the oil

prices going down. you not know whether a war will break out somewhere or not. i expect 3.5% will be reasonable growth for the united eights and that is pretty good. >> what are you most worried about today? >> i am most worried about the things i do not know. >> it kind of seems like you know everything. >> some head of state might be incapacitated, that could affect the world, there could be war breaking out, maybe interest rates go higher, you just do not know. >> here is one on him factor people are talking about -- they do not know whether there will be a problem in the bond market. in fact, some of your peers are talking about the possibility of a crisis in the bond market. if something happens with monetary policy or there is some kind of shock in the world, and people decide they need to exit bond positions, do you worry about that liquidity crisis? >> i have heard about it, but i do not see it as being realistic right now.

i do not see it being a gigantic problem. the federal reserve is carefully monitoring everything a goes on any fixed income market, and they are able to take steps that would be necessary to make sure the liquidity problem does not happen. >> what grade would you give janet yellen? >> i think she has done a very good job. i think ben bernanke did a spectacular job. i think he reinvented the fed to some extent and deserves credit for doing things during the crisis in pursuing a state of easing. i think janet yellen has done a good job following a lot of what he did. >> david, we will end on that note. >> my pleasure, thank you very much. >> david rubenstein, cofounder and co-ceo of the carlyle group. >> we have a lot more. stay with us. when we return,'s changing the way we speak about the banks. one of the cofounders of paypal. stay with us. you are watching' "market makers " very special doubles addition. ♪

>> welcome back to "market makers." we are live from switzerland. i am erik schatzker. >> and i am stephanie ruhle. we are joined by one of my favorite guest. max levchin cofounded paypal peavy he is with a company built on the premise that the u.s. credit system is broken. he is with us now to talk about the way big banks have it all wrong. max, welcome.

we have spoken about this before. you believe that people especially young people hate banks. that may be true, it seems to me like everyone uses them. the same argument that no people do not want to work for goldman sachs and morgan stanley. why does the system need to be changed? >> there is a conflict. old-school financial institutions seem to have lost the trust of the millennial generation by way of screwing their parents during the financial collapse. during the most emotional time in these kids days. it is not that they hate the banks, they do not trust them. >> they still use them. when i go to the atm, i see a 25-year-old use them.

>> it serves its purpose. i'm not see justin banks -- i am not suggesting banks are broken, millennial's are looking for an alternative. >> if you walk the streets of davos you will see a lot of people whose job it is to defend the legacy model. establishing banking or financial institution run by ceo's who are 15 to 20 years older than you. do they get what you are talking about? >> they get it, but they have a lot to lose. they cannot afford to you lose their customer base. they cannot flip a switch and say, we are going to do exactly what these young people need. they have billions and trillions of dollars of balance sheet to protect and serve. i think the millennial demographic is underserved

ready for disruptive product offerings. the existing infrastructure providers are not doing anything about it. that is why there is room for innovation. >> is it so bad, those young people aren't using banks? >> what knocked me back 63% of millennial's do not have or use a major credit card. i do not think -- >> because they do not have the money or do not have the system -- like the system? >> they do not like that. they do not think it is structured to help them just the opposite. >> that is true. if it were structured to help you, it would not be 15%. not sure that is true.

your lending money perhaps you should make money on interest, which is an honest time-honored way of making money. making money on late fees hidden fees, there are forms of things you are not completely aware of worked fine for the last generation, because they understood. the young generation does not care for that. they want to know what the cost of money is and do not want to be hit with this six-month cash. >> when did this shift happen? during the financial crisis, credit card debt was a massive problem. >> that is why there is a net 100 million credit card situation. 100 million credit cards have disappeared from the united states credit system since 2008. some people did not read new but people have walked away from their credit card offerings aggressively.

the shift occurred in a couple different ways. if your parents were selling their house short, there is crime going on in the living room. you were learning a lesson. the bank that was supposed to stand behind mom and dad did not do that. lesson number two, you grew up with social media. you do not know a world without it. you start complaining, and you hear your friends repeat it. it became front and center of discussion. >> like a firm -- does not need to sell credit cards. if they do not like debt and do not need to be in a business like credit cards, do you need a balance sheet? >> i don't think they like debt that is not honest. they do not like a fixed term

loans. >> it is not clearly explained. >> you can build a product that clearly explains that. a firm offers financing that a specific to the purchase, allows people to split a purchase into several monthly payments. very easy to explain what it costs. here is the money, here is the cost of money. you don't -- it appears that my 25-year-old customers love it. >> what do you need to convince people that are not necessarily of your mindset, what do you need to convince them of? >> i think the most important thing -- i am not out to destroy the financial system. i am a partner in that world.

what i think is important for everyone, including big banks and small banks, the millennial demographic are very different. they live in the world of information and knowledge instantly. nothing goes by this group of people without being examined, picked over, and understood on twitter, on medium, on facebook. you would get yourself very much look over if you are offering a product and it doesn't seem transparent. >> what are the best business opportunities that those trends present? >> i wish i could start 10 companies. >> what are you looking at right now that you can say, there is a problem, i will solve it? >> every kind of financial

service is waiting to be reinvented for the modern americans. for every young person in the world. there is an incredible amount of opportunity in health care crazy amount of fun stuff that will be available and connected homes, appliances cars. data security is the thing that has happened to all of us, we just don't know it yet. >> we have all been hacked. >> the haven't part is an illusion. it is a part of life. if you run your thermostat to save you money, preprepared that there is operating system that has a port of entry. someone is going to be configuring it for you. that is critical.

>> that means you have to change your password. >> you are the vanilla ice of technology oxford ownership. -- entrepreneurship. if there is a problem, you will solve it. max levchin is the cofounder of paypal. >> when we come back, he made the case to the nation, now president obama heads off to lobby after the state of the union. ♪

>> welcome back to "market makers." i am olivia sterns in new york. we will take you back to davos in a few minutes. the top global business stories. it looks like the european central bank is writing to the rescue. the executive board has proposed quantitative easing up $58

billion a month through the end of 2016. a total of $1.3 trillion. the central bank is trying to stave off deflation. it is up to the ecb's governing council, which could still change the plan. a decision will come tomorrow morning. international investors have not been this bullish on the u.s. in years. according to a new bloomberg poll. 54% of those say the u.s. will be among the markets offering the best returns. up five percentage points from november and the highest rating for any country. shares of netflix up as much as 16% in early trading. the company says that within 2 years it will profitably reach 200 countries that have broadband. they reported higher than expected subscriber growth in the fourth quarter. the president of ukraine warns the country is in grave danger because of the escalation of

fighting. he spoke to bloomberg television. >> we have an information about 2000 additional russian troops crossing our border. 200 tanks. this is creating a great danger for further escalation of the situation. >> he also insisted that ukraine will not renegotiate last year's cease-fire. president obama is headed to boise, idaho to sell the proposal he announced last night in his state of the union. use the speech to tell the country that the financial crisis is finally over. >> at every step we were told our goals were misguided. too ambitious/ . that we would crush jobs and exploded deficits. instead, we have seen the

fastest economic growth in a decade. our deficits cut by two thirds. a stock market that has doubled, and health care inflation in its lowest rate in 50 years. phil mattingly joins us from washington. also with me, john heilman. it sounds to me that the economy is finally recovering and it is time for the president to take more money away from the wealthy to fund the middle class. >> that is the point he was trying to make. the top economic numbers are in a good place. if you look at gdp, the stock market unemployment. incomes are sagging. this speech was about, there has not been an improvement there. everybody in his agnostic team -- economic team realizes that.

they are going after the capital gains rate. they will try to increase it five percentage points. for the top 1%. use money gained from that, as well as going after inherited wealth to try and find tax credits for middle-class, for students that is at the core of it. long-term, it will not go anywhere in the current congress. >> in the lead up to this, the present has done this strip tease, preannounced these policies. you knew what was coming. >> what jumped out to me, because he has done so much previewing, they often have a laundry list quality. he previewed the things -- he was more loose and stylized. the confidence level and the swagger where the things that came across. you have never seen that from barack obama in the state of the union. his first date of union where he

got up and said, the state of the union, on the economy, is strong. for six years, that has not been true. it is true now, and it gave him try out. -- triumph. >> we have a soundbite i want to play that captures it well. a president that seems to have his groove back. >> i have no more campaigns to run. [applause] >> i know, because i won both of them. [applause] >> the president -- what is the white house reaction? >> bayfield great. -- they feel great. 50% thought the speech --

thought positively about the speech. not partisan talkers on either side, but measured folks. what last night reflected, you mentioned swagger, it reflected a white house that hat -- feels really good about where they are. their approval ratings are up they like their economic numbers, they feel like they have a good message. anybody's yes how much longer that will last -- anybody's guess how much longer that will last. that was reflected in the president's tone. >> that was a drop the mic moment. >> i am struck by the fact that stephanie ruhle called max levchin the vanilla ice of the tech world.

do you agree this was his best speech? >> there were some that says this was his best speech, i think in terms of the state of union it was. what we will get out of it, the likelihood of cooperation, the president was posted set down a marker. he did not reach out to congress. most of what he is proposing are very popular with people in the country, but not republicans. in terms of trying to set the stage for his final 2 years, in terms of making an argument, in terms of trying to recapture the initiative, and say, i will not be buffeted by forces outside my control. i think it was impressive in that regard. >> perhaps laying the groundwork for the 2016 presidential election.

phil mattingly, thank you. coming up onm," the 1% have flocked to switzerland. ♪

>> welcome back. i am stephanie ruhle along with my main man erik schatzker. >> we are in switzerland. reporters looking for scoops. along with 2500 business people political leaders, and 100 billionaires. our man on the beat is matthew miller. what have you seen so far? >> we do need to be mindful last year, the three of us sat here talking about the topic of income inequality. when you put it against the backdrop of the fact that we are surrounded by over 100

billionaires, world leaders, one of the most exclusive ski resorts in the world. we were mocked incessantly. >> when you think about income inequality that is not a topic of conversation that comes up a lot with billionaires. they talk about terrorism russia and ukraine. the situation escalating. they talk about interest rates the price of oil, they do not talk about income inequality. so much ink is used to talk about income inequality. >> i put that weston to the founder of the economic forum, and he responded, i think billionaires care about inequality. >> they care about it in terms of their philanthropic dialogue. if you are talking to these people, most of these evil are coming here from -- for information from corporate

executives. what is going on in other countries. not so much how do i spin my philanthropic dollars? >> are they here to hear themselves speak? >> there is a short and platform here that makes people accessible. most of the billionaires i speak to are not ones you can get regular interviews with. >> who do they want to meet with? of the billionaires you follow, one message -- what message are they trying to get? >> the one person everyone said they wanted to meet wasn't jack ma. >> at one point does having a billion dollars or more no longer become enough with these people to care about? with the price of entry has to

be something like philanthropy? >> your net worth is where you rank plays into it. most of them would tell you that somewhere between $500 million and $1 billion, your private jet , your castle in france and all of your apartments. that is the number. everything after that is scorecard. >> how rich are these people? put in perspective, we talk about this .01%, how rich they have become. >> if you look at the top 400 people on earth, they are worth $4 trillion. there is a study that said the top certain percentage 1% basically will control the majority of all the wealth on earth. >> you are tracking their

conversation. we will check in with you tomorrow. we will be back with more. ♪

>> live from bloomberg headquarters in new york this is "market makers." with eric schatzker and stephanie ruhle. >> deal or no deal. the man to see about that is john studzinski who runs m&a at the blackstone group. >> when it comes to disruption big blue is not singing the blue. we will sit down with the chief innovation officer at ibm. >> we will talk to the ceo and chairman of bank and them -- of bank of america. >> i'm stephanie ruhle. >> i am erik schatzker.

we are in switzerland for the world economic forum. >> i want to send you to the newsroom or olivia sterns has the bulletin. >> the european central bank is preparing a $1.3 trillion stimulus program. the ecb's executive lord has --. the central bank is trying to stave off display shun. it is up to the governing council which could significantly change the plans. that will come tomorrow morning at 7:45 eastern time. the secretary-general of opec did not want to pin down on a price of how low oil could go. he admitted there was a limit. >> the price will go to 20 or 25.

it will be clear in june. of 2015. it will be clear and we will know exactly how the low price affected the supply. >> he said prices would stay around $45 or $50 per hour. >> amazon got a pop 15 minutes ago. up 4.6% to above $300 a share. there's a lot of chatter that perhaps carl icahn is building a stake. this is unsubstantiated. we are reaching out right now but the talk is carl icahn is building a stake and pushing up the stock. amazon stock has been running behind. investors have been running out of patience with jeff bezos who

owns 18%. last year amazon lost 2%. it is now down 1.5%. -- lost 22%. it is now down 1.5%. >> this is john stood in ski. the vice-chairman at the next own group. john, welcome. he is here to talk about what would happen in 2015. to give us -- intent. -- to give us fashion tips. >> i'm not sure that program is long enough for that. >> we and others have reported that starting tomorrow it will buy $50 billion a month of bonds. a quantitative easing similar to what the fed did. it will add up over the course

of two years to more than one trillion euros. >> when you look at the number crunching, and there has been interesting number crunching over the past couple of weeks in europe, i think this part -- the smart number crunchers had a minimum of $1.5 trillion and the ability to actually buy back. >> reflate? >> if we are buying back domestic bonds, people may or may not want to sell the bonds. you may own it as a savings or pension vehicle. the question of availability of supplies is an issue. and then there was a minimum of 1.5 trillion. i realize that draghi has not made any announcements, but my judgment is that anything north of one trillion, anything too far north of one trillion would

have gotten a lot of domestic scrutiny in the german government. and the german participants on the board. my own sense is whether this is 1.1 trillion or 1.3 trillion euro, my sense is that that is probably a compromise, a little low to have the impact people feel is necessary. we will see in the next couple of days how the market reacts. >> when we are home the u.s. economy is long and strong. now that we are in dov oh, the conversation is broader and more pessimistic. do you agree? >> everyone talking about the u.s. is very positive. whether it is 3% or 4% in 2015

it is very positive. as david rubenstein said the u.s. is a positive environment. i think the stocks can come from europe. next year we will be sitting here at this time in 2016, and what can happen in the next 12 months is you could end up with a european political landscape that is much more right wing in northern europe and left wing in southern europe. you can end up with a politically polarized europe which is not -- which is making a mockery of the democratic process. from a stability pointed to you, you have problems with economic growth in europe. deflation and youth unemployment is high. ms. merkel is the only credible leader. she has three plates. she has to balance the negotiation between putin and the u.k. the discussion on the

ecb and whatever the future of the euro is and she has to manage a domestic situation in terms of the anti-islamification movement. she is a leader and europe could use a few more. >> if you have political polarization of right and left and north and south of europe, and the uncertain impact of $50 oil going south, and quantitative easing starting and the fed raising interest rates in the u.s. -- >> it's a party. >> i didn't say that the fed was going to raise interest rates in the u.s. i don't think it will happen in the short term. >> now all of those things

haven't happened. what are the implications? >> more volatility. do member the power of social media? think of what we have seen in two weeks with what happened in paris and elsewhere. you can have the perception of a lot of very unhappy people, and a lot of unstable countries. one of the reasons, not to bring him in, but i always do, one of the reasons why the pope is so credible in this environment is he is one of the few people who are a good role model, lives what he says, and he speaks in a way that everyone can understand. very few political leaders do that today. that is one reason why there is such a lack of credibility and political leadership. >> as long as the ecb is pumping in money do leaders care about the delicate political environment?

>> they won't have a choice. in 2008 the world did an astute job of managing people -- of managing the crisis. the best brains solved the problems. now you have variables between the rich and the poor, youth unemployment unhappy people and the immigration issues. you have issues that will exponentially affect each other and create an unstable europe. >> what would you like this to look back to in history. the comparison? >> i was at dinner in london the other night and i compared aspects to 1830-1835 or 1930-1940. in europe. these are times that because you have people with economic

uncertainty, people who are unemployed, people who are hungry, and you have a wide range -- for the first time since social media you have greater transparency than in 1830 or 1935. >> does it matter to professional investors. you have had people who are hungry and horrible youth unemployment for the last few years. yet carlyle has gotten a lot richer. >> certain parts of the population has gotten richer. the top percent. if you are a major corporation around the world and there's a lot of activism, look what happened with the arab spring in egypt. factories were shut down for months and it affected production. i am not saying that will happen in europe, and i'm not trying to be an alarmist, but we have to

be realistic how unstable the situation will become. yes, stephanie investors do pay attention to that. they say it is a little uncertain and to volatile. let's postpone this decision until we have more information. >> you have made one prediction with more volatility. let's put you down for one more. >> we have to come to grips with the weaponization movement. regardless of what happens with mr. putin he is here to stay for the short-term. we have seen the hacking with sony. we have become so focused on defense spending and military initiatives as a way of showing military dominance and being assertive, i think in the 21st century we have to focus more on

the weaponization of finance. you're seeing that with sanctions taken against luton in russia. that is having residual impact on creating a banking system. the weaponization of energy secondly. you see that was saudi arabia taking a more confident assertive view about competing globally with americans for the production of oil. they want to maintain that position. it is a defensive and offensive position. the biggest concern, thirdly is technology and coding. the tactical coding as a weapon, which we saw with sony and you could see with a major financial institution. there is no reason why one government did not target a major financial institution as opposed to playing games with

the army's twitter address book. president obama said he wanted to make sure the cyber sensitive issues were handled by homeland security. >> when you're here the sun goes down literally and figuratively. thank you. john studzinski from blackstone. we will be back with more market makers.

>> innovative is what every company says they are trying to be. it is the only way for firms to beat back companies that say they can do everything better. we will look at how eb -- ibm is doing that with bernard meyerson. ibm is over 100 years old. surely there were times when ibm was considered the innovator. i am not sure you have that brand. >> we reinvented the company and

change the world numerous times. just like anything else you go through a transition. if you think about the evolution of our mainframe those systems where the company evolution. our investment was such that if it worked we were euros and if it didn't we were gone. it worked and change the world. originally we thought we would only need 10 computers, and we were a little off. the secret to life is close is good enough if you get enough rate. test enough right. we going to a transition now. there will be ups and downs. >> what is the strategy? >> cloud which is becoming a dominant market force. if you look at analytics, we made and early big bet.

that has been successful. if you look at social and security. these two things drive massive amounts of associated things like storage. the amount of data on social media being generated requires a huge amount. data same thing with analytics. >> you are blue sky visionary. how much pressure does a person like you at ibm under to take the research and development and turn it into things that ibm can sell? . you get that -- >> he did that for him staring in the mirror. myself and my team has taken things out of the fundamental physics lab and put it in your devices and pockets. when i started at ibm it was semiconductors. reinvented a technology that

extends the life of silicone. it is in every device in the world, almost. we made it happen, got it in the field, and it was a huge difference. >> what are you doing to differentiate yourself? >> and you look at big data, it is an empty set of words. there is a great example with a children's hospital in trenton to give you an example of why it matters. a baby is born prematurely with minimal defenses against infection. these children become septic highly infected, and you do not know until their bodies collapse and they die rapidly. it is called baby crashing. it is a war to see a baby that looked great one minute and is dead the next. we collected every imaginable piece of data on this child's

body and we looked at any baby that went through that they be crushing phenomena and found there were hidden signals 24 hours ahead that warned them of impending subtests -- impending septis which allows you to treat it. >> widen i know this. it is an amazing example. when i think about ibm i didn't know that. i love this story. >> i will tell that to the press guys. they will be happy. we do this all the time. if you go to rio de janeiro. in 20 10 there was a series of rain storms and floods that killed 110 people. when the flood comes out the streets may not be paid, houses collapse, and people died. the mayor said this was intolerable and they would fix

it. we build a supercomputer that predicted the weather with accuracy plus or minus one kilometers. we can do that at about 12-20 four hours ahead and pinpoint where it will be a problem in terms of volumes of water. we can integrate that with the topography and the makeup of the city, which is all data, and tell you where to get people out of the way proactively. you don't want to react to a disaster, you want to avoid it. that is something we do with technology. we are not getting it out there. >> that is amazing. >> you are putting it out there right now. >> you're getting it out there right now. >> that is something that every company needs to have a stake in doing. we are doing heat maps for ebola . in sierra leone we are

collecting data from the population by a number of different means. they let us train operators. they said we need these resources. >> we have run out of time, unfortunately. >> for 103-year-old company, so interesting. bernard meyerson the chief innovator at ibm. >> we are live from the world economic forum at davos, switzerland. the chairman of bank of america. one of the issues they're talking about is mobile banking and what is going on on the bond market.

>> i am scarlet fu. we have an update on amazon. shares of amazon are still up more than 2.5%. they climbed to $306 a share. on chatter on twitter that carl icahn is building a stake in the company. we are reaching out to carl icahn, he has not yet responded. perhaps because carl icahn has a stake, that is why it has come off of its high. the stock market has closed before the announcement on quantitative easing. the equity market is riding a five-game winning streak into tomorrow's decision. the german government bond yield is moving higher to above 50 basis points. german sold debt earlier with an average of 0.04%. the euro is at an 11 year low even as it --.

versus the yen the euro is weak or. a quantitative easing of 50 billion euros per month starting in march has been suggested. more "market makers" coming up after this.

>> live from bloomberg headquarters in new york this is "market makers" with erik schatzker and stephanie ruhle. >> we are alive, coming to you from davos switzerland. brian moynihan is here. he is the ceo and chairman of bank of america. nice to see you here. >> it is great to be here. >> a classic new englander. no jacket, no gloves, no hat. >> it is about 60 out here. [laughter]

>> fixed income trading got people down. can we extrapolate from the fourth quarter into 2015? >> as you move through december, the activity dried up. there was volatility with no activity. >> with no trading. >> no trading, no customer activity. we make our money when customers are moving. the last few weeks, the activity is through the roof and trading is coming back. we will see how the rest of the quarter goes because it is literally very early. customers are back doing work after the holidays. first quarter is always the best quarter for us. it is early on.

the difference between the latter part of the quarter was that the activity dried up as people got uncertain. >> could this swiss franc move and of being a net positive for bank of america? >> when you have an activity like that you usually have a huge spike in volume four couple of minutes. [laughter] we were sustaining two to three times normal volume for about an hour. that is how we make our money when activity is going on. when the volume is flowing, most of the industries basically have taken a risk down. >> some banks lost money on the swiss. >> we made money through last

week. it was on the activity. >> but they are not supposed to have big positions either. >> i can only talk about us. >> one of the other things that happened last week, one of your peers, another ceo of a big bank , said that he feels the industry is under assault by regulators. do you share that feeling? >> if you look at our company and think about what happened to us the toughest time for us with the regulators was 2009, 2010 and 2011. between the acquisitions of countrywide, the acquisition of merrill lynch all of that went on like boom, boom, boom.

we did the risk management teams and compliance teams earlier. i do know that i'm used to it but we built up those teams and we had the mortgage crisis behind us. that was our achilles heel and that is on its way down dramatically. it does not feel the same. if you asked me in 2010 how i felt, it might have been different. >> from a supervisory perspective, are the fed and regulators forcing you to operate with one hand tied behind your back? >> we operate and do what we need to do for our clients. the whole industry is trying to move beyond the crisis going forward, so the need to finish the cleanup it is frustrating at times because you think you are done but there is a clear line of sight between us and our regulators and what we have to get done and we are working on it every day and it is getting done. to me, it is not something that

overly worries me right now. if we stop in these rules then and get this done, it will be a good thing. >> how is your relationship with regulators? >> we have a strong relationship. >> that is quite a lot different than, i feel a salt by regulators. >> will you can talk about that with jamie. [laughter] >> what happens if a major cyber hack attacks bank of america? you are forced to shut down for two or three days. what could that due to you as a bank? >> you prepare by trying to get ready and working on it consistently. >> isn't every company trying to get ready until they get hacked? >> we are into several hundred million dollars per year of category spending. we process 1's and 0's. we do pretty well.

it is the fear of the moment, it is a topic here at davos, we are going to have experts talk to us in the financial services governors meeting tomorrow. i got to bed every night that that group -- knowing that that group has all the money they need and they don't have to ask. that is the only group in the company that does not have budget constraints. >> really? >> why would i take my judgment and say, you can do this cheaper? >> is this the first time that that is the case? >> i have never had a place where you have that. yes. they are judicious and how they spend it, but you have to be willing to do what it takes at this point. >> that is a bit of a wow. what are you going to need to

spend in 2015? >> north of $400 million. that's millions not dollars. [laughter] >> i sure hope it's not dollars. why is there more talk again about the need to break up universal banks? >> that is discussion propped up by research reports. i think the discussion is relatively premature from a policy and shareholder standpoint. think about us. we have gone through all this work and it is really premature. from a policy standpoint they said we need more cap, liquidity, the scope of activities you need to pay her people with different schemes. we are literally doing all of that. we are finalizing the rules. they are just coming out. we have to let time getting to

figure out what the customers will look like, what the capital structure will look like, profit opportunity, market. on the shareholder side if you think that we have optimized the place, we are still far away from it. there is a lot of move ahead of us. >> can you quantify the benefit to shareholders? >> it is in the billions. it is a straightforward thought process. the municipal underwriting business -- they issue bonds. the 401k platform. we have a 401k platform that we did $10 billion of new assets last year. this year we already have $6 billion coming in. it is fantastic growth. >> why du get it right when some

of your other peers have given up on this -- do you get it right when some of your other peers have given up on this? >> let me back up and say one thing. clients and customers want this. we can provide mobile banking because of our scale and our scope. >> you pay a 1.5% penalty for being a large, universal banking institution and that could go up. they have talked about raising that number. if you had to hold 1.5% less capital you would have $27 billion to give back to shareholders. >> it would be less than that but we are comfortable with think her mental numbers -- incremental numbers. >> how many years will it be before we see the true earning

power of bank of america? >> it is the cost structure in servicing that mortgage loans it is the overall cost structure, and the third element is the u.s. economy getting back to normal. >> how many years? >> the federal start raising rates in the latter part of this year and if that is true we are still well below any norm we are seeing -- well over $3 billion per year. >> brian moynihan, born to be the ceo of bank of america because he is ice running through his veins. [laughter] he has no gloves, no hat he is not shivering. i swear it is freezing here. >> it is, indeed. >> not even flinching. i want to run a bank. >> you want to stay tuned for this. the front lines on the war

against deadly diseases. we will talk to the head of the cdc. ♪

>> you are watching "market makers" live at the world economic forum in davos switzerland. dr. tom friedman is with us from the centers for disease control. it appears the tide is turning in the fight against ebola. >> the tide is turning, but we are not out of the woods. until the last case is found, we won't be out of the woods. until the last cases found and the epidemic is over, it has the risk of flaring back into these countries and elsewhere as well. >> how far are we from that point? >> it differs by area. liberia has made a lot of progress.

sierra leone has a lot of cases, but is scaling up their response. ginny is a cup -- guinea is a cautionary tale. they have almost been at the finish line a couple of times but it has come back. >> this outbreak has been incredibly different -- difficult for you and other authorities to bring it under control. >> a weak link in one spot is a risk everywhere. global health security is a key need. find, stop, and prevent health threats before they become epidemics. also, strengthening our ability to move in as a global community when they do happen. >> anything the cdc should have done differently in retrospect? >> i don't know if there's a single organization that can look at can say, we did everything correctly. >> clearly not. >> the ebola epidemic has moved

so quickly. it is always changing. the quickness of it, the need to surge staff in and meet communities and address community needs -- these are something that every organization has struggled with. this is the largest response and cdc press history. -- in cdc's history. >> is there a threat left in the united states? >> there is a potential of having a case as long as there is ongoing transmission in west africa. we have made real progress, but we can't let down our guard. we have to learn from this experience to build better systems so that it does not get out of control next time. >> what emerging or uncontained disease concerns you most? >> drug-resistant bacteria is particularly concerning.

bacteria that are not killed by antibiotics. there is something called cre. it is the class of resistance that some of the deadliest bacteria that does not respond to any of our antibiotics and it can kill up to half the people in hospitals and that is just one of many deadly threats from drug-resistant bacteria. >> why is that not getting enough attention? >> there are some medications that we overuse like antibiotics and some that we underuse. we have to get that right if we are going to maximize health and productivity. >> how long will it be before new and agents will find a way to the market? >> it will be a while. what we do know we can do today is better stewardship, taking better care with the antibiotics we have today so that they will be available for us and others

tomorrow, not just for things like pneumonia, but also for treating cancer, treating arthritis. all of these conditions are treated with powerful drugs and you often get infections. if we can't get them under control, we may lose much of our medical care. >> think you so much. dr. thomas frieden, the director of the centers for disease control, with us in davos, switzerland. ♪

>> thank you so much for sharing our first day in davos with us. >> tomorrow, it only gets better. the ceo of blackrock will be with us. >> we will have eri;k's exclusive interview with bill gates. we will be sharing that with you and so much more and giving you the davos experience. >> the sun is down.

>> we have to warm up. >> that is true. we will see you tomorrow. [laughter] ♪

>> bloomberg television is on

the markets. the dow jones is rising. european markets closed at their best level before the ecb decision tomorrow. the euro is firmer but hovering near an 11 year low. the central bank has proposed a $50 billion sovereign bond buying program. -- 50 billion euro sovereign bond buying program. when we look at the markets, equities in particular, european stocks and u.s. stocks are higher, but volatility is also rising. >> it is hidden -- an unusual situation. vol is remaining pretty sticky in the face of all these macro catalysts that are coming up in the near term. we have greece, the fomc meeting, the ecb meeting.

all will remain the same until we get past these macro catalysts. >> 50 billion euros per month. that number was a number that everyone is looking for and people are wondering if that is enough to get people to make positions. >> it is a positive. that is that the higher end of what people were expecting to bring the ecb balance sheet up to a level that people are happy with. there are more details that need to be figured out. are they going to be investment-grade bonds? is liability going to be left up to member countries or is the ecb going to take responsibility? a lot of details are still unknown? >> those details won't necessarily come out tomorrow at the ecb news conference. the volatility could last until the next ecb meeting. >> that is true.

the level of detail and specificity with regard to the asset purchase program will be a driver of volatility in the near term. >> january expirations were last week. the january contracts tend to be heavily traded because it is one way for people to set a year outlook. what does it look like? >> a lot of the contracts of been replaced. there was a lot of volume going into the january expiration. we are still seeing pretty heavy volume. option volumes in general in the face of all these macro catalysts has been healthy. a lot of the january expiration has been placed. >> wynn and las vegas sands cut from neutral to buy. both of these stocks have stumbled. >> the real culprit is the chinese government crackdown on corruption in macau.

how this is affecting the high rollers who tend to throw it around. this is scaring away the high rollers. >> what kind of options activities do you see in these names? >> mostly bearish. mgm is very high right now. it has become somewhat of a crowded trade. there is a lot of short exposure, a lot of downside puts. earnings coming up might be a catalyst. >> let's get to your trade which is on the regional financial, the etf k re: -- kre. >> the big banks all reported that they traded down on earnings. i like the kre. we get a high concentration of earnings over the next couple of weeks.

it seems like a pretty cheap wii play the downside of the regional banks. >> we talk about how low interest rates occur but it is also the shape of the old curve. >> borrowing and lending are a different average maturities. the shape of the yield curve effects rates as well. the flattening of the yield curve is a negative, just as much as lower yields are. >> thank you so much. "money clip" is up next. ♪

>> welcome to "money clip." i'm pimm fox. it is back. it is winter. that means davos. your merry band of economists and bankers drinking hot cocoa at the world economic forum in davos. talkinga about making money with sam